Best Buy: ‘Solid’ Holiday Performance, Says Citi

By Tiernan Ray

Shares of Best Buy (BBY) closed up 53 cents, or 1.3%, at $41.08, today, following the biggest buying period of the year, the combination of Thanksgiving day, Black Friday, the weekend following Black Friday, and today’s Cyber Monday frenzy.

Citigroup‘s Kate McShane today reiterates a Buy rating, and a $48 price target, writing that she thinks the company had a “solid” holiday performance, based on store ”checks” and “our conversations with people in the industry.”

McShane thinks Best Buy did a good job offering discounts on a lot of the in-demand consumer electronics items, as well as staggering them over several days to keep consumers coming back through the weekend:

Through our Black Friday store checks, we observed long lines to enter BBY for doorbuster products including: a BBY exclusive LG 55” LED TV for $500, iPad 2 16GB WiFi for $300 (reg. $400), Kindle Fire HD 7” for $100 (reg. $200), BBY private label Insignia 39” LED TV for $170 (reg. $330), Dell 15.6” Celeron laptop for $178, and limited quantities of Xbox One consoles released at the opening and during a 4am doorbuster promotion. The strong offering of steep discounts on key CE gift categories like TVs, tablets, and video games made BBY’s Black Friday event very competitive among big box retailers. BBY executed its holiday doorbuster promotions well through staggering releases over the course of the night and into the morning, which generated traffic and created a more orderly and sustainable way of converting sales. For example, at one location we checked, BBY had Xbox One consoles available for sale when the doors opened at 1am but made a second batch of Xbox One consoles available at 4am which either kept customers in the store or gave customers reasons to revisit the store over the course of Black Friday. In addition, the orderly way in which BBY gave doorbuster items to people who waited in line helped the retailer avoid some of the chaos seen at other retailers.

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There are 3 comments

DECEMBER 2, 2013 5:00 P.M.

NORETURN wrote:

Look at BBY's return policy and you will see this is just a short term push on sales. With 15 days return policy, they will lose a lot of customers after the Holiday season as people try to return gifts. Poorly manage stores, advertise products always out of stock, sales rep push to sale stuff in stock (personal experience, they don't even know the product), cashers not aware of BBY's return policy. Short BBY after Q4 release

DECEMBER 2, 2013 5:38 P.M.

Incorrect wrote:

Noreturn: Best Buy has a Holiday Return policy that states any purchases made after November 3rd, you have until January 15th to return them. Know your facts before you make random statements.

Also- when its not during the season Best Buy has a 15 day return policy because they sell electronics, not clothing or other misc. items that can be sold any time within the next year. If Best Buy purchases and sells a laptop at a set price, within 30 days that item could be discontinued or price dropped.

DECEMBER 3, 2013 11:47 A.M.

Wrong wrote:

You are missing the point of the first guys argument... competitors are offering better return policy on the same items.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.